Tuesday, May 03, 2005

Peak Oil Looms, While U.S. Remains Gluttonous

If you are a Monty Python fan, you will remember the famous restaurant scene from The Meaning of Life. In it a fawning waiter begs his grossly over-weight client, who has just finished a meal of obscene proportions, to have “just one thin mint.” The diner’s gut is already strained to the breaking point, and when he finally ingests the mint, his body explodes.

Unfortunately, America bears a remarkable resemblance to the diner in the Monty Python skit. On a daily basis we gobble up several times more petroleum than we produce. Our gluttonous appetite for oil has brought the economy to the breaking point. Will we come to our senses and realize that we must curb our oil addiction? Or will we have to “explode” first?

In 1972 Donella and Dennis Meadows, together with Jorgen Randers and William Behrens, published The Limits to Growth, which analyzed the interrelated impacts of population growth, industrialization, malnutrition, environmental deterioration, and depletion of nonrenewable resources—in particular, oil. They predicted that the planet would reach its limits to growth within the next 100 years. The first crisis would be the world supply of oil, which they predicted would diminish around the year 2000.

In the ‘50s, geologist M. King Hubbert coined the term, “peak oil,” to describe the tipping point at which petroleum supply reaches its maximum annual output. Total United States oil production reached its peak in the seventies. Now, the question is when the world supply will reach its zenith.

Recently a number of academic papers have been published that forecast the peak year for world oil production. Most place this event in a time period between 2005 (Princeton Geologist Ken Deffeyes) and 2014 (Germany’s Deutsche Bank). Not surprisingly, the most optimistic projection—2037—comes from the Bush Administration’s forecasters at the Department of Energy.

When peak oil will occur is more than an academic issue. It represents an important milestone for policy makers because it sets a “drop dead date” for our preparation for a time of oil scarcity. Experts believe that it will take at least 10 years for the economy to make the transition from oil to the various alternatives; the longer we wait to start this, the more extreme the economic turmoil will be.

Nonetheless, the Bush administration believes that we can postpone our move away from an economy based upon cheap oil. Administration policy seems to be driven by Vice-President Cheney, who famously remarked, “Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy.” The Bushies are betting that their rosy estimate of the peak oil year is the correct one and, therefore, a petroleum crisis won’t happen on their shift. In their 2006 budget proposal, the administration actually cut funds for energy conservation. Next year they will phase out the tax credit for buying a hybrid vehicle (and leave in place the write-off for a Hummer.)

To fully grasp the consequences of the Bush administration irresponsibility, we need to consider what peak oil actually means: the U.S. is half way through a cycle that began in the early years of the nineteenth century, when crude oil literally bubbled out of the ground. Now, all the “easy” oil is gone: the reserves that remain are either relatively inaccessible, or in geological formations that are difficult to process. Much of the remaining oil is of poor quality.

The United States is not alone in seeking this oil. Globalization has resulted in the industrialization of many countries and this has heightened the demand for carbon-based fuels. When America seeks to buy a barrel of oil, we are competing with China, the European Community, India, Japan, and others.

After years of cheap oil, Americans are beginning to experience the combined effect of diminishing supplies of oil and increased demand. The price for a barrel of crude oil hovers near the all-time high of $58 and experts are talking about prices in the $75-105 range. The price for a gallon of gasoline will probably hit $3 this summer.

Criticism of the Bush administration usually begins with its poor record at predicting future events. A prime example would, of course, be Iraq, where they promised that Iraqi oil production would pay for the occupation. The truth is that today’s Iraqi oil production is less than it was before the invasion and we have to import oil (1.7 million gallons of fuel per day) into Iraq in order to fuel the American occupation; as a result, the occupation has cost billions more than original estimates. No doubt, this inability to forecast will also be the lasting record of the Bush administration with regards to peak oil.

History will judge George and company harshly because of their indifference to the looming oil crisis. Rather than lead the US away from its oil addiction, the president seems content to play the role of fawning waiter, approaching gluttonous America, begging, “Please sir, just one thin mint.”

Bob Burnett is a Berkeley writer and activist. He can be reached at bburnett@comcast.net.

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